Hospital and Health System Deals Mark Busy March

Bloomberg BNA's Health Law Reporter April 2018

Gary W. Herschman and Kevin J. Ryan, Members of the Firm in the Health Care and Life Sciences practice, in the firm’s Newark and Chicago offices, co-authored an article in the Bloomberg BNA's Health Law Reporter, titled “Hospital and Health System Deals Mark Busy March.”

Following is an excerpt (see below to download the full version in PDF format):

March was a very active month for health-care industry transactions, demonstrating a healthy ramp-up from the beginning of 2018, and confirming that 2018 will be a banner year for health-care M&A activity.

This consolidation frenzy is no surprise, as mega-players continue to make major announcements showing their hands, and how they view the future of the industry—including Amazon, CVS, Walmart, etc.—and as United/Optum continues to bulk up across the outpatient sector (with ASCs, urgent care, and dozens of large multidisciplinary physician groups).

While Health-Care IT and Long-Term care saw a slight dip from previous months in 2018, the hospital and physician sectors saw increases from February transactions. This was particularly true in the Hospital sector. There is no doubt that already large hospital systems will get bigger as they navigate antitrust barriers—through cross-border mergers and affiliations and adding some smaller players that have remained independent thus far.

M&A activity in the hospital and health system market saw the largest number of transactions of any sector in March. On the heels of a strong start to the year, over 30 deals were either announced or closed in March 2018, compared to 16 deals in March 2017, an increase of 69 percent year-over-year. These deals included acquisitions, strategic affiliations and dispositions. The continued strong volume in the hospital sector M&A market has the potential to result in another record year in deal activity, with 46 deals announced or closed YTD March 2018 compared to 34 YTD March 2017, an increase of 35 percent year-over-year.